Commercial Division Blog

Posted: May 26, 2016 / Categories Commercial, Res Judicata/Collateral Estoppel/Entire Controversy Doctrine

Res Judicata Bars Claim Not Raised in Prior Action

On May 10, 2016, the First Department issued a decision in Wietschner v. Dimon, 2016 NY Slip Op. 03664, holding that res judicata barred a claim in a new action even though that claim had not been raised in a prior action in federal court involving the parties, explaining:

The amended complaint should be dismissed in its entirety as precluded under the doctrine of res judicata. The claims in this action and in the federal actions arose from the same series of transactions involving the directors' oversight of a corporate anti-money laundering program, and, aside from the different time periods alleged regarding the directors' lack of oversight, had the same origin and formed a convenient trial unit. That the complaints set forth different theories of recovery and that the claims in the instant action were not actually raised in the federal actions present no impediments to application of the doctrine. The dismissals for failure to adequately allege demand futility were on the merits and entitled to res judicata effect.

(Internal quotations and citations omitted) (emphasis added).